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DSR 11C
4.
The Chinese claim that all the treaties affecting Hong
Kong are unequal'. But they have not formally abrogated
them. They are deliberately equivocal about the significance
to them of 1997. On the British side, the legal position is
clear cut. Unless new powers are taken, the Governor's right
to administer in the New Territories ceases in 1997.
British law there is a distinction between the New
Territories and the rest of Hong Kong which is held in
perpetuity. But, in practical terms, the whole territory
is now indivisible.
The Lease problem therefore affects the
future of the whole of Hong Kong.
In
5. So far attempts to get the Chinese to focus on this,
problem, including specific suggestions for an interim
>
solution made in 1979, have failed. For the Chinese
leadership, doing anything to prolong British administration
is a political minefield. They are happy with the present
position by which Britain administers Hong Kong and China
gains great economic benefit from it. But they have made it
clear that they are in no hurry to deal with the problem of
the future. They believe that the generalis assurances
they have already given (investors should 'put their hearts
at ease' whatever happens their interests will be looked
after)(are sufficient. This is not the case because unless
uncertainty over the Governor's powers after 1997 is
removed, confidence will fade quite soon. Moreover,
administration will become increasingly difficult as the
time for which the Government can legally commit itself
shortens.
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6. When the Chinese are prepared to discuss the future,
parallels with their policy towards Taiwan suggest that they
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/might
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